Senate Approves New Rental Law

On Wednesday afternoon, the Argentine Senate unanimously approved the draft amendment of the Civil Code regarding the rental law.

The amendment aims to regulate rental contracts and control abuses by landlords and estate agents by limiting commissions and restricting price increases.

In Buenos Aires alone one in three people rent their property

The bill, which was drafted by organisations for renters across the country, was presented by Senator Silvina Garcia Larraburu and reforms the Civil and Commercial Code by establishing guidelines for the negotiation of rental contracts. One of the chief regulations is the limit applied to price increases of rent, to become adjusted annually rather than more frequently by landlords. Furthermore, the rate of price increases will be restricted to an annual figure set by the government determined by a more realistic average based on changes to the both the rates of salary and inflation.

The bill also aims to lengthen the term of rent contracts from two years to a minimum of three years alongside regularising the commissions and guaranteeing deposits paid at the beginning of these terms. In May 2016 a proposal was passed by Inquilinos Agrupados and the Civil Association for Equality and Justice that demanded that real estate agencies stop charging two months commission during the signing of contracts, and since this was passed they have only been authorised to charge one month commission. This new law reiterates this, with the payment of a single month advance as commission and one for the deposit, which will be returned, updated in its value, at the end of the fixed contract. It also establishes that real estate commissions can be determined by the laws of each jurisdiction, and in the case that this isn’t regulated then it can never exceed the value of one month of rent. Also outlined is that any unexpected extra costs that incur during the time of the contract, for example necessary repairs to the building, are not the responsibility of the renter and are to be paid by the landlord alone.

Gervasio Muñoz, a member of the Inquilinos Agrupados said that the bill will generate “a cultural change, it would move the control of the prices of the rental market away from the landlords to the renters. If there is an set index, it will generate predictability and stability not just for renters, but also for the owners.” Inquilinos Agrupados is a small group of campaigners and one of only 14 similar organisations in the country, helping to support renters by providing legal advice and trying to improve the law, as seen by their involvement in drafting bills for change such as this one.

In an interview on Tuesday before the Senate passed this amendment of the law, Muñoz noted that the bill would be another positive step, as the rental sector ‘‘has started to develop a voice and become part of the political agenda after decades of being silenced.” He also defined the aim of their organisation and of the bill by stating “we are trying to make our city about those who live in it, and not just about what is good for the market.”

More than 6.5m people who rent properties in Argentina, and in Buenos Aires alone one in three people rent their home, the percentage having risen in the city from 22.1% in 2001 to 33% today. Now, after this positive result, the next step for these renters and associations is gaining the support of legislators in the Chamber of Deputies to also sanction the change.